Misgav, Israel and London, UK – 5 May 2010 - Medgenics (AIM: MEDG, MEDU) is pleased to announce its preliminary results for the 12 months ended 31 December 2009.
The Annual Report and Accounts of the Company and its subsidiary (the Group) will be posted to shareholders during the week commencing x May 2010 and will be available on the Company’s website (www.medgenics.com) from the date of posting.
Highlights
• Signed first agreement with a major pharmaceutical partner - a preclinical development and option agreement for Biopumps to treat haemophilia with Factor VIII, with a market leader in haemophilia.
• Proved sustained anaemia treatment with unprecedented 6-12 month duration from a single EPODURE treatment, in low dose of Phase I/II trial in patients with chronic kidney disease; Israel Ministry of Health approval and funds raised to commence higher dose study.
• Introduced INFRADURE at major European EASL liver conference, with two posters presenting key data showing INFRADURE Biopumps producing interferon-alpha for use in treatment of hepatitis C, also proving the concept of the Biopump Platform producing various proteins.
• Obtained issuance of key new patents in USA, Japan and Korea.
• Significantly expanded partnering discussions with interested pharmaceutical and device companies. • Raised additional funding, through equity, debentures and warrant exercises, in the UK and the US.
Financial Summary
• Net loss after tax of $4.41 million (2008: $4.85 million).
• R&D costs for the twelve-month period of $1.32 million (2008: $2.10 million) and general and administrative costs of $2.54 million (2008: $2.76 million).
• Cash and cash equivalents at 31 December 2009 of $0.47 million (at 31 December 2008: $1.04 million).
Dr. Andrew Pearlman, Chief Executive Officer of Medgenics, said: “This last financial year was transformative for the Company, with some significant accomplishments for Medgenics, achieved against the powerful tide of the financial storm which has swept the globe.
Through the creative and tenacious efforts of truly dedicated staff, we have managed to navigate the storm while keeping our key operations moving forward, which enabled us to achieve unprecedented results in our EPODURE clinical trial and to complete our first commercial agreement with a major pharmaceutical company.
The demonstration of over 6-12 months of sustained anaemia treatment from a single administration of EPODURE in patients with chronic kidney disease proved that an appropriate dose of EPODURE can provide effective and sustained anaemia therapy and represents an unprecedented duration from a single treatment in patients – replacing scores of EPO injections. Our clinical results build upon the extensive laboratory experience, with more than 5,000 Biopumps successfully produced from more than 150 patients’ tissue.
Furthermore, the EPODURE clinical results, taken together with our production of interferon-alpha (IFNa) by INFRADURE Biopumps, have proven the concept of the Biopump as a platform to provide safe and sustained production and delivery of therapeutic protein on a continuous basis.
This demonstration of the Biopump as a platform technology helped convince our first pharmaceutical partner, a market leader in the field of haemophilia, to pursue with us a new application of the Biopump: to produce blood clotting Factor VIII, which if successful, could revolutionize the treatment of haemophilia. This first deal validated the commercial appeal of the Biopump value proposition, the strength of the Biopump science, brought needed funds to our operations and strengthened our ongoing efforts to raise equity funding.
This first commercial agreement has also spurred a substantial increase in commercial interest in the Biopump platform technology, as we found at the BioEurope conference in November 2009, and continuing in 2010. For Medgenics’ more advanced pipeline applications, EPODURE in Phase I/II clinical trials in anaemia, and INFRADURE in preclinical stage, Medgenics will seek during the coming 12-24 months to reach attractive terms with partners along the lines of recent deals for protein therapies, involving milestones for preclinical and early stage clinical applications.
We have now obtained approval to extend our EPODURE Phase I/II trial to an additional major teaching hospital in Israel’s largest city, the Tel Aviv Sourasky Medical Center, to continue with the higher dose treatments – implementing an important step in our plan made possible by the recent and ongoing fundraising, and have already commenced patient recruitment.
In addition to EPODURE, we are continuing to advance our pipeline development of other protein therapies on the Biopump platform. In particular, INFRADURE, the Company’s Biopump for producing IFNa for treating hepatitis C, has moved forward.
We introduced INFRADURE for the first time at a major clinical conference, when we presented two posters in April 2010 at the leading European conference on liver disease, EASL, generating interest from liver experts, pharmaceutical and hospital product companies. Our Scientific Advisory Board experts on hepatitis C, and numerous of their colleagues at the EASL conference, confirmed the value proposition of INFRADURE in the future treatment of hepatitis C, even with the likely introduction of new direct antiviral agents.
Meanwhile, we are continuing early stage development of a Factor VIII Biopump, with our commercial partner. The haemophilia (Factor VIII) Biopump deal structure potentially provides a model for new applications more generally, including a funding mechanism for proving feasibility of a new Biopump application before commencement of licensing negotiations. Following on this model, Medgenics is exploring opportunities for further commercial interest in new applications using the Biopump platform to provide superior delivery and treatment over existing protein therapies. In addition to developing new protein applications of the Biopump, the Company has advanced, and continues to advance, its planning for practical scale-up and commercial implementation of its Biopump treatment technology. This includes designing automated Biopump processing technology utilizing low cost single-use sealed cassettes intended for use in regional or local Biopump processing centres capable of producing and storing Biopumps for hundreds or even thousands of patients per year, in a cost-effective manner.
The practical implementation of the Biopump system will take advantage of the robustness and stability of the microorgans and Biopumps for practical logistical transport using standard shipping means. This will enable local implementation of microorgan harvest from patients, and Biopump administration to patients, by their own local physicians.
As the Biopump processing centre model evolves, an additional concept for partnering has emerged and garnered interest from potential partners: the establishment and operation of regional or even local Biopump processing centres. This model can offer pharmaceutical partners the advantages of Biopump therapy in their market applications, building on their existing infrastructure for selling injected therapeutics, while sparing them the need to establish their own Biopump processing centres.
Medgenics believes its unique technology aligns the Company with the objectives and priorities of the recent U.S. healthcare reforms, since the Biopump directly addresses major objectives such as:
• reducing costs while not reducing care – the inherent cost-effectiveness of the Biopump can offer same or superior clinical efficacy at lower cost than standard of care or current alternative treatments
• preventive medicine - Medgenics believes Biopump technology can make a significant contribution in such areas as management of renal anaemia, obesity and diabetes, where control can help prevent deterioration and further health issues.
• personalised medicine – a Biopump produces the patient’s own protein, which extends the concept of personalised medicine from diagnosis to therapy.
These advances have brought Medgenics to what we believe is a new chapter: the pre-revenue commercialization stage, where the Company can now focus major attention on advancing partnering activities towards deals with bio/pharmaceutical or other therapeutic partners for Biopumps producing various proteins and clinical applications and with manufacturing partners to set up Biopump processing centres and produce Biopumps.
We look forward to 2010 with renewed vigour. Against the backdrop of a difficult financial climate, we are now positioned to move forward on many fronts with the aim of developing the Biopump as a commercially viable platform technology, offering substantial advantages to patients, doctors and third-party payers over existing protein therapies. We will continue to update our shareholders as we make further progress in these respects.”
